One year later, businesses, former employees still struggling after International Paper's closure

ISLE OF WIGHT - Teresa McCaskey remembers laughing the moment she heard International Paper Co. was shutting down its paper mill in southern Isle of Wight County.

"I thought it was a bad joke," recalled McCaskey, one of more than 1,100 workers who learned on Oct, 22, 2009 – one year ago today – that she would be losing her job in the months ahead. "Then I cried, I didn't know what would happen."

The company's unexpected announcement last year stunned employees, local and state government officials, and the communities that grew up around the bustling mill that began production in the late 1880s. The mill had historically hired generations of local families and pumped a steady stream of tax revenue into local coffers.

Beginning in November 2009, the four paper-manufacturing machines that had spewed billowing plumes of steam, smoke and pungent odors into the air for decades gradually ceased production. The layoffs came in waves starting on Dec. 31. They ended after the final machine ground to a stop in late June.

The Isle of Wight mill was the largest of three sites the Tennessee-based company closed as part of a corporate overhaul to reduce operating expenses and beef up earnings by about $100 million annually. The local mill bore the brunt of the 1,600 layoffs generated by the three closures.

International Paper was not alone in its economic concerns. The recession crippled the manufacturing industry in 2009, forcing major companies around the nation to declare bankruptcy, shutter facilities or lay off employees. While the recession factored into International Paper's decision, company officials have stressed the declining use the Isle of Wight mill's main products – uncoated freesheet paper and coated paperboard – as the primary reason it was closed.

But International Paper's executives had visited the mill just weeks before the closure announcement and told employees and local community leaders that the company was profitable, making goals and had a bright future.

"That's why the timing was a shock," said Phillip Bradshaw, chairman of the Isle of Wight Board of Supervisors, who worked for the company for 25 years. "I expected it within five or 10 years, but we were blindsided by this announcement. We took those smokestacks for granted for way too long."

In fiscal year 2012, the county is expected to lose approximately $5.7 million annually in tax revenue from the mill's closure, while Franklin will lose almost $1.2 million annually it received from a revenue-based non-annexation agreement brokered with the county years ago. The state is projected to take a $20.6 million hit in tax revenue.

The closure announcement spurred the three communities hit hardest by International Paper's closure – Isle of Wight and Southampton counties and the city of Franklin – to quickly form a regional taskforce addressing the needs of displaced workers and looking for ways to cushion the fiscal blow to small businesses that relied on International Paper or its employees for business. The taskforce also considered the potential future use for the company's facilities, although that decision ultimately remains with the company.

In the early days after the announcement, the most pressing issue was to help soon-to-be displaced workers find new jobs or determine what they wanted to do once their mill jobs were eliminated, said Randy Betz, vice president for work force development at Paul D. Camp Community College in Franklin and a former mill worker. Many employees had worked for the company for decades and planned to retire from the mills, just as their fathers and grandfathers had done, he said.

By November, a One-Stop Career Center, which had previously operated from the college campus, had set up shop at International Paper. The center, run by representatives of the Virginia Employment Commission and Opportunity Inc., helped workers learn about unemployment benefits, job openings and retraining opportunities, and learn interviewing and other career development skills.

The One-Stop Center, which moved back to the college's workforce development center in June, receives about 1,300 client visits each month, Betz said. That is more than double the monthly traffic it saw before International Paper's announcement, he added.

More than 400 salaried and hourly workers have found new jobs at approximately 60 different employers, including some employees who opted to relocate to other International Paper plants, Betz estimated. More than 100 people, including McCaskey, have gotten new jobs at Northrop Grumman Shipbuilding in Newport News.

Additionally, more than 100 displaced workers are using the Federal Trade Adjustment Assistance program – a federal program available only to workers whose jobs were lost because of increased imports – to return to the classroom, Betz said. Many life-time mill workers, just a few years from retirement, are taking classes to learn new trades and skills: welding, airline mechanics, nursing and physical therapy.

Unlike many closed plants, which often lie dormant and vacant for decades, International Paper has told local officials it will try to repurpose – that is, reuse – its 1,300-acre Isle of Wight site. Over the past few months, the company has studied 15 proposals from prospective investors interested in using the property for various types of biomass energy facilities.

The company has narrowed the list of final contenders and is in the process of getting additional feasibility information from them, said Lisa Perry, county director of economic development. Terry McAuliffe, a Democrat who was defeated in a bid for his party's gubernatorial nomination last year, said in July that his company, Leaf Clean Energy Co., was a finalist. McAuliffe's proposal calls for refitting the paper mill as a wood-burning power plant.

International Paper spokeswoman Donna Wadsworth said the company hopes to release an update by the end of the year.

After years of depending on mill workers for customers, many small businesses in rural Isle of Wight and downtown Franklin are hanging by a thread. Other companies that counted International Paper as their primary – if not only – customer have already shut down or traveling greater distances to reach customers.

People were scarce during lunch hour on a recent Friday at Fred's, a popular eatery where just seven tables were occupied. A year ago, mill workers would have packed the restaurant around noon most days during the week, following on the heels of 6 a.m. regulars from the mill clamoring for coffee and breakfast before or after their shifts.

"It's been devastating for all of us," said Gerry Patnesky, owner of downtown Franklin's upscale gift shop Alphabet Soup. "Although people have really made an effort to support local businesses over the past year, we're suffering because people have scaled back on their spending.

"We're surviving … and just hoping that International Paper is going to bring some good news to us soon," she added. In September, Patnesky said she had to ask her creditors for extensions on some bills, until she had an influx of revenue from the annual downtown fall festival at the end of the month. "I've never had to do that before."

Business at Joe's Pizza and Pasta Palace, which sits in the shadow of the silent paper mill, has dropped more than 40 percent over the past year, said owner Joe Misseri. He said it's depressing, particularly when he knows how much potential the mill site has for alternate uses.

"It's hard hearing all these rumors," said Misseri. "We've been getting by, but the past six months have been a little tough for me. I have a family, mortgage and bills to pay … and I'd like to keep all those obligations I've made.

"I don't know how much longer small businesses are going to be able to hang on … without some positive changes."